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 economic..??

  Economic means "pertaining to theproduction and use of income.”

  Economic Activities Mone! earning #pending

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What is environment..??

Circumstances, infuences, stresses,and competitive, cultural,demographic, economic, natural, political,

regulatory, and technological actors that aectsthe survival, operations, and growth oan organization.

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EC!"#C E!$#%!"E!&

• Economic actors which have their aect on thewor'ing o the (usiness.

• #ncludes system, policies and nature o aneconomy, trade cycles, economic resources,

level o income, distri(ution o income andwealth etc.

• %epresents the economic conditions in thecountry where the international organization

operates.• )ggregate o the nature o economic system othe country, (usiness cycles, the socio*economic inrastructure etc.

•+ynamic and comple in nature.

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• +irectly %elated with Economic )ctivities

• #mpact o !on Economic -actors

• #mpact o asic #nrastructure

• #mpact o #deology o the /eople• )vaila(ility o Capital

• Economic +isparities

• +irectives o the 0overnment

• Economic /lanning

• #deology o the 0overnment 1 Economic 2ystem

• /u(lic "orality

-eatures o Economic Environment

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(3ectives o Economic Environment

/roper -unctioning o an Economy 4nowledge o !ew pportunities 1

%esources

2tudy o Environmental -actors ptimum 5se o Environment

"inimizing ill eects

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Classi6cations o the Economic

EnvironmentMicroeconomic environment7

#t includes the economic environment o aparticular industry, 6rm or household and isprimarily concerned with price determination oindividual actors.

E8cient allocation o resources.

 &his is necessary to maimize total output.

Macroeconomic environment$ #t includes allthe economic actors in totality. &he mainconsideration here is the determination o thelevels o income and employment in theeconomy.

i h

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-actors )ecting theEconomic EnvironmentIn%ation and de%ation7

#nfationary and defationary pressures alter thepurchasing power o money.

+irect impact on consumer spending, (usiness

investment, employment rates, governmentprograms and ta policies.

Interest rates7 +etermine the cost o (orrowingand the fow o money towards (usinesses.

  E&change rates7 )ects price o imports, thepro6ts made (y eporters and investors andemployment levels 9also through the impact onthe tourism industry:.

Monetar! and 'sca( po(ic!7 ;elps in attaining

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Elements o Economic Environment

Economic Conditions

Economic 2ystem

Economic /olicies

#nternational Economic Environment

Economic

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Economic Conditions

2tages o usiness Cycle!ational #ncome, /er Capita #ncome and

+istri(ution o #ncome%ate o Capital -ormation

+emand and 2upply &rends#nfation %ate in the Economy#ndustrial 0rowth %ate, Eports 0rowth %ate#nterest %ate prevailing in the Economy

 &rends in #ndustrial 2ic'nessE8ciency o /u(lic and /rivate 2ectors0rowth o /rimary and 2econdary Capital

"ar'ets

2ize o "ar'et

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Economic 2ystems

-ramewor' o rules, goals and incentives thatcontrols economic relations among people in asociety.

;elps in providing ramewor' or answering the(asic economic =uestions.

+ierent countries o a world have dierenteconomic systems.

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Capita(ism$• usiness units or actors o production are

privately owned and governed is calledCapitalism.

• /ro6t earning is the main o(3ective.•

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#ocia(ism All the economic activities of the country are controlled

and regulated by the Government in the interest of the

public.

• Democratic Socialism:- All the economic activities are

controlled and regulated by the government but the

people have the freedom of choice of occupation and

consumption.

• Totalitarian Socialism:-  This form is also known as

Communism. Under this, people are obliged to work

under the directions of Government.

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Mi&ed Econom!oth pu(lic and private sectors co*eist is 'nown

as "ied Economy.2ome actors o production are privately owned

and some are owned (y 0overnment.  &here eists reedom o choice o occupation

and consumption.oth private and pu(lic sectors play 'ey roles in

the development o the country.

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Characteristics an Economic 2ystem

!ational Entity

#nstitutional

#nterdependence

2carcity o %esources

!eed 2atisaction

+ynamic

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Economic /olicies0overnment rames economic policies.Economic /olicies aects the dierent (usiness units in

dierent ways. &he 0overnment may grant su(sidies to one (usiness or

decrease the rates o ecise or custom duty or thegovernment may increase the rates o custom duty andecise duty, ta rates or another (usiness.

Economic policies play an important role in the (usinesspolicy ormulation.

>. Monetar! )o(ic!$  &he policy ormulated (y the central(an' o a country to control the supply and the cost omoney 9rate o interest:, in order to attain some speci6edo(3ectives is 'nown as "onetary /olicy.

. *isca( )o(ic!+,udgetar! po(ic!$ #t is related with theincome and ependiture o a country. -iscal /olicy wor's asan instrument in economic and social growth o a country. #t

is ramed (y the government o a country and it deals withtaation, government ependiture, (orrowings, de6cit

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@. *oreign Trade )o(ic!$  #t also aects the dierent(usiness units dierently. E.g. i restrictive import policy

has (een adopted (y the government then it willprevent the domestic (usiness units rom oreigncompetition and i the li(eral import policy has (eenadopted (y the government then it will aect thedomestic products in other way.

A. *oreign Investment )o(ic!$  /olicy or theinvestment (y the oreigners in a country is 'nown as-oreign #nvestment /olicy. # the government hasadopted li(eral investment policy then it will lead tomore infow o oreign capital in the country which

ultimately results in more industrialization and growthin the country.

B. Industria( )o(ic!$  promotes and regulates theindustrialization in the country. &he government rom

time to time issues principals and guidelines under theindustrial policy o the country.

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#nternational EconomicEnvironment

#mportant role o international (usinessenvironment.

"!Cs are infuenced (y economic environmento (oth home countrys and the country theyare wor'ing in.

$arious rules and guidelines or these tradeswhich are issued (y many organizations li'eWorld an', W&, 5nited !ations, #"- etc.

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Economic